Industrial Relations Commission of New South Wales in Court Session CITATION : Stonham v Speaker of the Legislative Assembly of NSW and Anor (No. 6) [2003] NSWIRComm 208 APPLICANT Anne Margaret Stonham PARTIES : FIRST RESPONDENT The Speaker of the Legislative Assembly of New South Wales SECOND RESPONDENT Gabrielle Harrison FILE NUMBER: IRC649 of 1999 CORAM: Peterson J CATCHWORDS : Costs - Proceedings under s106 - Notice of Motion - Claim by applicant that party to party costs not be awarded to the respondent parties - Claim by applicant that party to party costs would be prejudicial and contrary to equitable objectives of the jurisdiction - Claims rejected - Party to party costs ordered. LEGISLATION CITED : Industrial Relations Act 1996 s106 CASES CITED : Kent v Cavanagh 1 ACTR 43 HEARING DATES: 06/06/2003 DATE OF JUDGMENT: 06/27/2003 APPLICANT Mr C Hockey, solicitor FIRST RESPONDENT Mr P Menzies QC with Ms T J Anderson of counsel SOLICITOR LEGAL REPRESENTATIVES: Ms J Rogers and Ms M Kelly Crown Solicitor's Office, SYDNEY. SECOND RESPONDENT Mr C W Love, solicitor Colin W Love & Co. SYDNEY. JUDGMENT: - 8 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: PETERSON J DATE: 27 JUNE 2003 Matter No. IRC649 of 1999 ANNE MARGARET STONHAM v THE SPEAKER OF THE LEGISLATIVE ASSEMBLY OF NEW SOUTH WALES AND ANOR. Application under s106 of the Industrial Relations Act 1996. JUDGMENT RE COSTS 1 On 6 June 2003 I dealt with the issue of costs of the proceedings and made orders against the applicant. The orders are: That the applicant pay the costs of the proceedings, subject to any earlier orders made in the proceedings, of the first and the second respondents on a party party basis in an amount as may be agreed or assessed. 2 The primary judgment in this matter was given on 20 February 2003, dismissing the application brought under s106 of the Industrial Relations Act 1996. As to costs, this was said: In the ordinary case, costs should follow the event. I will hear the applicant on the issue of costs if any different course is to be urged upon the Commission. In the absence of any request within 21 days for a listing on that issue, I would order that the applicant pay the respondents' costs as agreed or assessed. 3 Subsequently, the agent acting on behalf of the applicant filed a notice of motion seeking: Directions that party to party costs not be awarded to the respondent parties in this matter. The grounds and reasons for such an order were: 1. That the circumstances of the applicant's mental and emotion (sic - emotional) state is such that an award of party to party costs to the respondents would be grossly injurious and prejudicial to the applicant. 2. That an award of party to party costs would be contrary to the equitable objectives of the jurisdiction. 4 In support of the motion, an affidavit by the applicant was filed and, omitting formal parts, contained the following: 3. I understood when I commenced my application that party to party costs would be awarded to the successful party by the Court. 4. I also understood that when I commenced an application to join Ms Gabrielle Harrison to the summons that party to party costs would be awarded to a second respondent should my summons be dismissed. 5. I commenced my action in good faith and to the best of my ability told the truth as I could remember it in regard to the circumstances of my employment with the Speaker of New South Wales. 6. I am suffering psychiatric and emotional problems as a consequence of my employment with the Speaker of New South Wales. 7. I believe that my judgement and decision making is affected by these problems. 8. Since the dismissal of my summons I have been deeply depressed and feel that my condition has worsened. 9. I understand that the party to party costs awarded against me as an unsuccessful applicant are considerable although I have not received a precise calculation of those costs. 10. I have very few financial resources and am deeply concerned for the effect the costs award (sic - awarded) against me is having and will have on my family. 11. I request that consideration be given to my application taking all the circumstances into account. 5 Between the filing of the motion and hearing the applicant obtained legal representation by Mr Charles Hockey, solicitor. 6 The applicant swore a further affidavit, with the benefit of legal advice, which told a sorry tale of a breakdown in the relationships between the applicant and a series of legal representatives she had in the initiation and continuation of her s106 claim. It is not putting it too highly to state that the affidavit proceeded upon the basis that the applicant was largely manipulated by her legal representatives and was an ill and innocent participant in an exercise which produced formulations of affidavits which did not truly reflect her views. This affidavit annexed two opinions of psychiatrists in relation to the applicant's mental state, particularly in 1998 and 1999. It also annexed two statements of claim against the applicant, the first being a claim by a firm of solicitors who had acted for the applicant at an early stage in these proceedings, seeking $85,896.31 in respect of costs plus interest. A cross-claim by the applicant here seeks to recover $30,550.00 in respect of costs already paid to that firm of solicitors; an amount in respect of costs orders made in this Commission on 26 September 2001; damages pursuant to s58 of the Fair Trading Act 1987; interest; and costs. 7 The second statement of claim is one by the applicant as plaintiff seeking to recover, from another firm of solicitors which acted for her at one stage of the s106 proceedings, costs paid to that firm in the sum of $40,000; a further sum of $82,659.20 being the amount of assessed costs payable to that firm; and an amount in respect of costs ordered by this Commission on 26 September 2001. The applicant in those proceedings, also claims damages, interest and costs. 8 In the present proceedings, the submissions as to costs were presented under three heads which were articulated as follows: Firstly, the ability of the applicant to give proper instructions to her solicitors in these proceedings as well to swear affidavits, where her recollection was scrambled, if not faulty due to alcoholic and drug abuse over a long period of time. Secondly, the competence of the solicitors instructed by the applicant and her inability to give proper instructions and the applicant's inability to coherently assess offers made by the respondents in these proceedings due to her mental illness, and Thirdly, the applicant has been up against a formidable opponent in the State of New South Wales which has unlimited resources to fight her application in these proceedings. 9 As to the first submission, after tracing the history of the development of the case, it was submitted that it is obvious from that history that the applicant "was in no mental or physical state to complete any affidavits". Reference was made to the finding in the judgment on the merits that the applicant's recollection of events was so flawed by a combination of depressive illness, drug abuse and excessive alcohol intake as to be totally unreliable. It was submitted that ". . . this is a matter that should not have been brought before this Court, if anything, it should have been stayed until the applicant has recovered sufficiently to give reliable evidence". 10 As to the second ground, it was submitted that the cost of affidavits prepared in inadmissible form should not be borne by the applicant. This is particularly so in the light of her mental or physical condition at the time. This submission also mounts a serious attack upon the competence of the solicitors then acting for the applicant. It also criticised the agent who acted for the applicant in the final hearing, Mr Paul Matters. It was submitted, with respect to him, that ". . . this was a complex case that should have been handled by an experienced solicitor in this jurisdiction". 11 It was also submitted that the case should only have taken less than a week rather than some 22 hearing days, five before Hungerford J and 17 before myself. It was submitted that the sins of her solicitors ought not be visited upon the applicant. 12 As to the third head of submissions, this was put: The third head of my submission, the applicant has succeeded on one point Your Honour has found in paragraph 90 of your Judgment on page 41 that the applicant more probable than not had worked outside normal hours but found that there is an in-built overtime factor in the remuneration of electorate staff that worked outside normal office hours. This is a significant finding which in my submission affects their working condition in so far as overtime claims by electorate staff who are quasi public servants. The respondents in these proceedings is the State of New South Wales which is a formidable opponent with unlimited resources to throw at these proceedings. A cost order against the applicant would be a burden which no normal litigant would be able to carry. It is my submission Your Honour that it is not in the public interest that a cost order ought to be made against the applicant in these proceedings as it would only serve to inhibit, if not discourage any aggrieved litigants from proceeding against the State. I refer Your Honour to the decision of Kent vs. Cavanagh 1 ACTR 43 at page 55.20-45 in respect of actions against the Government. 13 The applicant's affidavit evidence identified a variety of offers which were made to her by the respondent/s with a view to settlement of the proceedings. I do not intend to identify the details of those offers. It is sufficient for present purposes for me to indicate that they were substantial and culminated, as I understand it, in an offer inclusive of costs, of $363,000. This was rejected by the applicant, as the present proceedings indicate. 14 The respondents submitted that they were entitled to costs in the usual way and that this was demonstrated by paragraph 3 of the affidavit filed in support of the motion (which I have set out above) where the applicant expressed her understanding from the outset that costs would be awarded to the successful party and, by paragraph 4, that the second respondent would be awarded costs should the summons be dismissed. Conclusions 15 As to the first argument advanced on behalf of the applicant, it seems to me that this argument reflects essentially the conclusions arrived at in the primary judgment of 20 February 2003. It does not reflect the applicant's evidence in the primary proceedings, where she maintained her recollection of events was broadly clear. While the affidavits filed in support of her case, from inception, were emasculated as the result of objections and rulings thereon, it was ultimately the residue of those affidavits upon which the case proceeded. 16 As to the second submission that the applicant was in no position to be able to properly assess offers made at the outset of the proceedings and during their course, I am quite unable to accept that proposition. The applicant did not demonstrate herself to be incapable of making that assessment. This was a case, which seems to me to have been crying out for settlement from the applicant's point of view. It was clear when the final settlement discussions took place during the course of the hearing of the matter, after four days of hearing, that the applicant's position was being sorely tested in cross-examination. No explanation has been given for the rejection of that offer, save an inaccurate suggestion that there would have been nothing left for the applicant after meeting costs (there would have been more than $120,000 left on my calculation). One is tempted to accept the submission for the first respondent that the applicant's motivation was greed. However, I think the true position probably is that the applicant believed her case was worth more than what was being offered because of her deluded belief in the facts she was alleging against the respondents. 17 I am not able fairly to assess the applicant's allegations against her former representatives, other than Mr Matters. There is material contained in her second affidavit in these proceedings alleging conduct by solicitors which is bizarre and, if true, outrageous. However, there is nothing before me to cause me to think that allegations of this kind are any more reliable than those which were made about the respondents in the main proceedings. The issue of the accuracy of any such allegation seems to me to be more appropriate to be dealt with in the proceedings between the applicant and those solicitors. 18 As to Mr Matters, I consider it only fair that I say something in his defence. Mr Matters is a former union official; he is now a law student. He was the person to whom the applicant turned, as Mr Hockey submitted, as "a new saviour". He appeared as agent for the applicant. Mr Matters, in the conduct of his case, was opposed to senior and junior counsel for each of the two respondents. He was required, by a ruling of Hungerford J, to observe the rules of the New South Wales Bar Association applicable to barristers in the conduct of a case. At times he had some difficulty with these requirements and, one has to say, that his conduct of the case, unsurprisingly, was not what one would expect of senior counsel. Overall, I would make no criticism of Mr Matters in the conduct of his case; indeed, I consider it, in the circumstances, to have been commendable. 19 As to the applicant's third submission, the following factors are material. Firstly, the applicant did not succeed on one point. I found she probably did work overtime but not to the degree which she claimed. The Award defeated her claim. 20 In Kent v Cavanagh, Fox J referred to the fact the applicant did have success on one point, but went on to say much more of significance. His Honour said: On the matter of costs, I think these should be borne by the parties which have incurred them. It is more usual when an interlocutory application for relief fails to order that the costs be paid by the unsuccessful party, or at least that they be the successful party's costs in the action. In the latter case he gets his costs if he succeeds in the action, but is not subjected to the risk of ever having to pay the cost of the other party in respect of the interlocutory proceedings. There is always a discretion and different considerations apply to each case. In the present case the plaintiffs have succeeded on one point and have brought to notice a serious defect in compliance with statutory procedures. But I am to some extent influenced by broader considerations. It seems to me undesirable that responsible citizens with a reasonable grievance who wish to challenge Government action should only be able to do so at risk of paying costs to the Government if they fail. They find themselves opposed to parties who are not personally at risk as to costs and have available to them almost unlimited public funds. The inhibiting effect of the risk of paying costs is excessive and not in the public interest. Once, not so long ago, litigation was more of a luxury than it now is and for the most part only wealthy people could engage in it. To them was usually left any action necessary to vindicate rights of the public. This is not now regarded as an acceptable situation. The courts must be, in practice, and not simply in theory, available to all. 21 It is this observation upon which the applicant relies in its third head of submissions. However, it is noteworthy that Fox J was dealing with an interlocutory application for injunctive relief. The considerations going to costs in that context are capable of being different to those arising in relation to final relief. Leaving aside the distinctive features of the different eras in which that case and this have arisen, the present case is not a case of a responsible citizen with a reasonable grievance who wishes to challenge government action. The applicant brought a case in which she failed on all aspects. 22 The observation of Fox J seems to me to be more concerned with the case of litigation, although unsuccessful, which ought not be deterred by a costs order. That cannot be said of the present matter. The fact that the "government" is, in part, the respondent, is not sufficient to justify relief from a costs order against the applicant. In my view, there is no warrant in this case for anything other than the usual orders as to costs. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.